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Moody’s eyes Bangladesh for downgrade
Moody's Investors Service said it placed the government of Bangladesh's Ba3 long-term issuer and senior unsecured ratings on review for downgrade. The outlook before the review was stable.
“The decision to place the ratings on review for downgrade is driven by Moody's assessment that Bangladesh's deteriorating external position raises external vulnerability and government liquidity risks in a way that may not be consistent with its current rating. This assessment also reflects governance weaknesses in the ability of institutions to take credible measures to arrest the deterioration of reserves adequacy,” the agency said in a press release.
Additionally, Moody’s noted the country’s foreign-exchange reserves hit by high energy costs and slowing growth in exports are in decline. The reserves sank around $11 billion in the last 12 months though Bangladesh still had $30 billion in reserves as of November, excluding gold and special drawing rights.
“The rating review will focus on understanding the scope and conditions under which IMF support will be provided. Moody's will assess the government's willingness and ability to consistently meet the IMF program’s requirements, given the challenging social conditions that have been intensified by recent fuel and energy shortages, as well as the support that the IMF program can facilitate from other international institutions,” the agency said.
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